SBI, HDFC Bank, ICICI Bank continue to be identified as Domestic Systemically Important Banks: RBI

 The indicators used for identifying a bank as D-SIB are: size, interconnectedness, substitutability (including total value and volume of payments made in Rupees) and complexity
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The Reserve Bank of India announced on Tuesday that State Bank of India (SBI), HDFC Bank, and ICICI Bank will retain their status as Domestic Systemically Important Banks (D-SIBs).

D-SIB-designated institutions must maintain supplemental common equity tier 1 (CET1) capital beyond standard capital conservation buffer requirements.

CET1 requirements remain unchanged from last year: SBI must hold an additional 0.80% of risk-weighted assets (RWAs), HDFC Bank 0.40%, and ICICI Bank 0.20%.

With the current CRAR (capital to risk-weighted assets ratio) at 11.5% (including 5.5% CET1), SBI’s loans require 12.3% capital backing. HDFC Bank must maintain 11.9%, while ICICI Bank needs 11.7% capital support against loans.

RBI evaluates D-SIB status based on four parameters: size, interconnectedness, substitutability (incorporating rupee payment volumes and values), and operational complexity.

The central bank’s December 2023 Framework for Handling D-SIBs notes that these institutions face heightened scrutiny due to their “too big to fail” (TBTF) status. This perception creates expectations of government intervention during crises, granting funding advantages while increasing systemic risks.

RBI warned that such expectations could incentivize excessive risk-taking, undermine market discipline, distort competition, and elevate future financial instability. The framework mandates enhanced regulatory oversight for D-SIBs to mitigate systemic vulnerabilities and moral hazard concerns.

Published on December 2, 2025